Lufthansa hit by IAG and Ryanair carriers
RYANAIR'S Laudamotion and IAG's Level are battering Lufthansa in Austria and Germany as the low-cost carriers drive down fares to grab market share there.
Lufthansa issued a profit warning yesterday, saying that its short-haul operations in both countries are "affected by sustained overcapacities caused by carriers willing to accept significant losses to expand their market share".
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Ryanair's Laudamotion lost €140m in the 12 months to the end of last March as the Irish carrier took full control of the airline. It expects the Vienna-based airline to become profitable by 2020.
"Price deterioration in Europe caused by market-wide overcapacities and aggressively growing low-cost competitors are putting pressure on yields in the European short-haul market," added Lufthansa.
It now expects earnings before interest and tax for the current financial year of between €2bn and €2.4bn, versus a previously expected range of €2.4bn to €3bn.